Transportation Technology and Gentrification: Evidence from the entry of Ridesharing Services

71 Pages Posted: 29 Oct 2024 Last revised: 2 Apr 2025

See all articles by Sumit Agarwal

Sumit Agarwal

National University of Singapore

Shashwat Alok

Indian School of Business (ISB), Hyderabad

Sergio Correia

Federal Reserve Banks - Federal Reserve Bank of Richmond

Deepa Mani

Indian School of Business (ISB), Hyderabad

Bernardo Morais

Board of Governors of the Federal Reserve System

Date Written: September 23, 2024

Abstract

 We analyze the staggered entry of ridesharing services across U.S. metropolitan areas, estimating its effect on spatial redistribution and real outcomes of households. By reducing the cost of personal transportation, ridesharing services incentivize the urban in-migration of higher income individuals, raising urban rents and housing prices by about 6 and 9 percent, respectively. The effect on incumbent residents is conditional on ex ante homeownership. For homeowners, there is small displacement and a decline in delinquency rates. For non-homeowners, displacement and delinquency rates increase 11 percent and 42 percent, respectively. Our study emphasizes how the provision of high-end transportation technologies can increase urban gentrification and exacerbate inequality.

Keywords: Consumer Finance, Gig economy, Gentrification, Household Finance, Mortgages, Residential real estate, Ridesharing services, Urbanization.

JEL Classification: O33, J23

Suggested Citation

Agarwal, Sumit and Alok, Shashwat and Correia, Sergio and Mani, Deepa and Morais, Bernardo, Transportation Technology and Gentrification: Evidence from the entry of Ridesharing Services (September 23, 2024). Available at SSRN: https://ssrn.com/abstract=4965150 or http://dx.doi.org/10.2139/ssrn.4965150

Sumit Agarwal

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, 117592
Singapore
8118 9025 (Phone)

HOME PAGE: http://www.ushakrisna.com

Shashwat Alok

Indian School of Business (ISB), Hyderabad ( email )

Hyderabad, Gachibowli 500 019
India
914023187188 (Phone)

Sergio Correia

Federal Reserve Banks - Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States

HOME PAGE: http://scorreia.com

Deepa Mani

Indian School of Business (ISB), Hyderabad ( email )

Hyderabad, Gachibowli 500 019
India

Bernardo Morais (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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